Existing Home Sales Slip

The new home market is on the rise in sharp contrast to the resale market which is flat at best. Existing home sales slipped 0.4 percent in May to a lower-than-expected 5.430 million rate and a year-on-year decline of 3.0 percent. Part of the lack of sales traction may be due to prices which, in contrast to the decline in sales, rose 2.7 percent in the month to a record $264,800 for a year-on-year gain of 4.9 percent. Supply improved in the month but remains thin, up 2.8 percent to 1.850 million units on the market with supply relative to sales at 4.1 months vs 4.0 months in April.

The resale market remains a dead weight and is limiting the housing sector's contribution to overall economic growth. In regional data, the Northeast popped higher in the month but remains the weakest resale region at an 11.7 percent yearly decline with the West at minus 4.1 percent and the Midwest at minus 2.3 percent. Sales in the South, which is by far the largest resale market, are unchanged on the year.